Obtaining financing for your business ventures is often challenging for entrepreneurs. From being in the startup phase to growing your business, you may face difficulties with the requirements of traditional bank loans. But the CBCHEDC Small Business Loan (SBL) Program may be able to help. Here’s some insight to see if this is the right option for you.
Am I eligible?
To be considered eligible for the CBCHEDC SBL Loan Program, your business must meet the U.S. SBA’s definition of small business*, operate for profit and you must have reasonable equity to invest.
You’re also required to do, or propose to do business, in the City of Boston or its surrounding neighborhoods. Another eligibility requirement is that you must have tried to use other financial resources, including personal assets, before applying for a loan.
* A small business generally has up to 250 employees and depending on industry, gross annual receipts of up to $750,000.00 depending on industry.
How can I use CBCHEDC SBL funds?
The SBL Program provides loan amounts for start-up costs and other small business-related expenses:
- Purchase new land (including construction costs)
- Purchase equipment
- Repair existing capital
- Purchase or expand an existing business
- Refinance existing debt
- Purchase machinery, furniture, fixtures, supplies or materials
What are the repayment terms?
Repayment terms will be established based on amount of loan, operating receipts and expenses, not to exceed seven (7) years. When possible, loans will be secured by personal guarantees and mortgages and/or liens.
CBCHEDC SBL Application Checklist
Once you have decided to apply for a CBCHEDC SBL, you will need to collect the appropriate documents for your application. Use the checklist below to ensure you have everything the lender will ask for to complete your application. Once your loan package is complete, it must be submitted to CBCHEDC.
- Loan Application – To begin the process, you will need to complete a loan application form. Your loan application must be verified in person.
- Personal Background and Financial Statement:
- Statement of Personal History
- Personal Financial Statement
- Business Financial Statements – To support your application and demonstrate your ability to repay the loan, prepare and include the following financial statements:
- Profit and Loss (P&L) Statement – This must be current within 180 days of your application. Also, include supplementary schedules from the last three fiscal years.
- Projected Financial Statements – Include a detailed, one-year projection of income and finances and attach a written explanation as to how you expect to achieve this projection.
- Ownership and Affiliations – Include a list of names and addresses of any subsidiaries and affiliates, including concerns in which you hold a controlling interest and other concerns that may be affiliated by stock ownership, franchise, proposed merger or otherwise with you.
- Business Certificate/License – Your original business license or certificate of doing business. If your business is a corporation, stamp your corporate seal on the SBA loan application form.
- Loan Application History – Include records of any loans you may have applied for in the past.
- Income Tax Returns – Include signed personal and business federal income tax returns of your business’ principals for previous three years.
- Résumés – Include personal résumés for each principal.
- Business Overview and History – Provide a brief history of the business and its challenges. Include an explanation of why the SBA loan is needed and how it will help the business.
- Business Lease – Include a copy of your business lease, or note from your landlord, giving terms of proposed lease.
- If You are Purchasing an Existing Business – The following information is needed for purchasing an existing business:
Current balance sheet and P&L statement of business to be purchased
- Previous two years federal income tax returns of the business
- Proposed Bill of Sale including Terms of Sale
- Asking price with schedule of inventory, machinery and equipment, furniture and fixtures